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Wednesday, August 7, 2019

News in 2035: Eskom Repays Debt and becomes world's top performing utility

What happens if Eskom's 50,000 employees are "given" Eskom and told that they each owe R10 million?

This debt must be paid by 2035. They are given an opportunity to fix Eskom and repay the debt and keep the balance of any profits that are made, or bigger salaries that are paid so that Eskom doesn't make a profit or loss (Eskom's original mission in 1923 was to operate without making a profit or loss; and from 1923 until 1974 prices dropped in real terms).

Four caveats:- 1) Eskom must at least breakeven and have zero debt by 2035; 2) Eskom can't put up prices by more than inflation; 3) Eskom is allowed 10 days of load shedding per year, planned or unplanned, with maximum 2 hours per day for any area. This means that Eskom will be able to load shed the entire country for 2 hours per day for 120 days per year. This so that they are given time to fix the system. 4) No more government funding.

If they don't pay the debt, they lose all their possessions up to the value of R10 million in 2019 money.

On 31st December 2035, Eskom reverts to government "ownership".

The Rands owed breakdown could also be prorated based on their salaries, length of service, time to retirement, etc.

Personally I believe that it is possible for Eskom to repay its entire debt by 2026 without incurring any more debt.

Note that Government can use this model for all SOE's without Privatising them. And the employees / workers get to run the companies for the next 16 years and if they fail they basically lose everything, which is pretty much the life of a normal entrepreneur, who stands to make a lot, but also stands to lose everything.

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